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2011 (5) TMI 531 - AT - Income TaxExport Profit Reserve Credited to partners capital - Addition - Held that:- If the CBDT had clarified provisions by the said Circular No. 463, dated 11-7-1986 and approved that the distribution of dividend constituted the utilization of the "reserve" as prescribed, then the same analogy has to be applied in the present case, i.e., in the case of the firm where the said "reserve" is transferred to the capital account of the partners - Therefore, held that there was no violation or infringement of those provisions of section 80HHC - See CIT v. Pravin M. Mehta [2000 (8) TMI 55 - BOMBAY High Court] - Decided in favour of assessee. Interest claimed on partners capital - Held that:- Once the credit of "reserve" in the capital account was held as lawful and that the Partnership Deed authorizes payment of interest obviously the interest to partners should not be disallowed. No fallacy in the said view of the CIT(A) because once the credit of "reserve" in the respective capital account of the partners have been approved in above paras, in consequence thereof, the partners are entitled for interest on the credit balance of their capital accounts, undisputedly as provided in the Partnership Deed - Appeal of the Revenue is dismissed.
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